Japan suffered another strong quake aftershock today and the government is expanding the evacuation zone around the crippled Fukushima nuclear reactor. None of this is good news for the country's businesses and the supply chains that affect corporations around the world. But companies such as HTC, Motorola Mobility (MMI), and even Apple (AAPL) have found ways to use their supply chains to improve competitive position.
One of the hardest-hit product segments in high tech has been mobile devices. A number of high-profile companies have struggled with Japanese parts shortages.
- Apple relied on Japanese suppliers for 5 key iPad parts. Best Buy's (BBY) iPad 2 shortage is likely evidence (though you have to wonder why the retailer needed to hoard stock for an upcoming promotion when the product already sells briskly).
- Sony Ericsson has delayed one product introduction until later in the year and at least two of its current handset models are feeling the parts pinch.
- Nokia (NOK) has already warned of component supply disruptions for a number of its products.
Companies that avoided over-reliance on Japan have ridden out the supply chain problems.That's a key strength in a consumer market like smartphones, because people tend to get new units on starting or renewing an account with a carrier. Being present at purchase time is key.
Motorola Mobility (MMI) apparently obtains inventory on a quarterly basis and also has alternate supply chains. Smartphone shipments, at least to Taiwan, have been uninterrupted. HTC had previously responded to a BNET inquiry, saying that it expected production to remain uninterrupted. To boot, the company just reported strong earnings last quarter, with sales in March double those of the same month in 2010.
Furthermore, even though Apple may have felt the sting of insufficiently diversified supply chains, it is addressing the problems. The company also reportedly used its procurement expertise to delay Research in Motion's (RIM) PlayBook tablet by snapping up components that the competitor needed to release its tablet.
Supply chain management may not seem glamorous, but it can be devastatingly effective.
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